Is O&G boom over in Alberta?

[Red]

Surely we have lots of posters that work in the industry.

With Suncor in trouble and Voyageur likely getting cancelled, plus our great Premier speech about bitumen challenges do you think Alberta O&G is in for a massive slow down? We've seen some layoffs already, more coming?

[AMG_G]

Could be a good thing...a little slow down might bring some of these people back down to earth with their salary expectations.

[polak]

The company I work for is expanding.

Suncor =/= Entire Alberta O&G Industry

Also, Suncor is still hiring too.

[The Big Thirsty]

The government revenue problem has nothing to do with the industry. It has everything to do with the total incompetence of the Alberta government.

[NuclearPizzaMan]

Originally Posted by AMG_G

Could be a good thing...a little slow down might bring some of these people back down to earth with their salary expectations.

Cost of living won't come down though.




Demand is down. Supply is up. Big push in the US to create even more supply. Environmental pressure...

Of course, we will continue to bank everything on O&G, artificially lower taxes with royalty revenue, fail to diversify, and set ourselves up for a huge crash! Fun times.

[burn_this_city]

No, I don't think so, its a temporary slowdown. Producers are waiting for resolution on the pipeline issues before proceeding with expansion plans. Gas producers have been beaten down for the last couple of years, they probably won't recover anytime soon, but I think overall things are fine.

[Bonded]

Originally Posted by polak

Also, Suncor is still hiring too.

Sears is still hiring as well

[Cowboy89]

Right now companies are spending through the current discounts to bitumen as most oil sands projects are long term in nature and require multiple years to build. The focus is on the long term and issues such as pipeline capacity are viewed as being more of a short to medium term issue that will ultimately get resolved. Capital investment in the sector is still higher than 2007 levels. This will keep up the demand for labor and jobs in the near term.

As for Suncor, Voyaguer was on borrowed time after 2009 regardless of the current pricing environment.

[GP_Matt]

The NEB just approved a third LNG export terminal in Kitimat. When these come on line there will be a lot of gas flowing west that used to flow east. The debate about the Enbridge Gateway pipeline has been the focus of most of the media attention because it is coming from the oilsands but other pipelines have been largely ignored. The Pacific Trails Pipeline has been approved and clearing has started to bring gas from Spectra's system to Kitimat. Transcanada has plans to bring a gas line in and I believe there is a third one that I can't recall. In Grande Prairie, Encana has announced a new LNG fueling station that should be operational by the end of the year. LNG has a huge potential as fuel for the transport, construction and drilling industries as well as being used to run generators on midstream facilities.

Historically, gas has been the main driver of Alberta and some of these projects could help that return.

[Tinordi]

Originally Posted by GP_Matt

The NEB just approved a third LNG export terminal in Kitimat. When these come on line there will be a lot of gas flowing west that used to flow east. The debate about the Enbridge Gateway pipeline has been the focus of most of the media attention because it is coming from the oilsands but other pipelines have been largely ignored. The Pacific Trails Pipeline has been approved and clearing has started to bring gas from Spectra's system to Kitimat. Transcanada has plans to bring a gas line in and I believe there is a third one that I can't recall. In Grande Prairie, Encana has announced a new LNG fueling station that should be operational by the end of the year. LNG has a huge potential as fuel for the transport, construction and drilling industries as well as being used to run generators on midstream facilities.

Historically, gas has been the main driver of Alberta and some of these projects could help that return.

Very little, if any, Alberta gas would be going to LNG facilities for export.

[Cowboy89]

Originally Posted by GP_Matt

The debate about the Enbridge Gateway pipeline has been the focus of most of the media attention because it is coming from the oilsands but other pipelines have been largely ignored.

You can blame the 'principles' of the BC government for that one. It seems to be that when you're piping and shipping a product that BC also collects royalties on then the risks of the associated pipeline construction and tanker traffic to and from Kitimat magically disappear.

[Red]

Will the pipeline fix everything though?

Isn't the biggest problem cheap conventional oil that drags bitumen down?

Was the decision not to build more upgraders a bad call?

I don't know much about the industry, hoping some on here can explain what's really going on. We don't see any indication that things are going to improve soon. Or do we?

[First Lady]

..... and here I thought things were picking up; with the hubby working in Alberta for the first time in about 4 years.

No more US phone bills - YAY!

[Cowboy89]

Originally Posted by Red

Will the pipeline fix everything though?

Isn't the biggest problem cheap conventional oil that drags bitumen down?

Was the decision not to build more upgraders a bad call?

I don't know much about the industry, hoping some on here can explain what's really going on. We don't see any indication that things are going to improve soon. Or do we?

It's not just a single pipeline that will 'fix' everything. It's going to take Northern Gateway, Trans-Mountain, Keystone XL, and TransCanada's new proposal to ship to New Brunswick to fix the transportation problem.

British Columbians will have to decide whether they want increasing numbers of rail cars full of bitumen going through their province (which have a much poorer safety record) or a pipeline (which is the safest and cheapest way to transport crude oil). The larger the differentials widen, the greater the financial incentive to get innovative with transportation alternatives and hence in my mind there's ultimately going to be solutions.

[GP_Matt]

Originally Posted by Tinordi

Very little, if any, Alberta gas would be going to LNG facilities for export.

Yes and No.
A lot of gas currently flows from BC into Alberta. A lot of this gas will now stay in BC and be exported instead of coming into Alberta. That is gas that was previously competing with Alberta gas and its absence from the system should help prices.
There are also hundreds of pipelines that currently flow gas between the two provinces and the entire system is integrated. The TransCanada line will start in Dawson and will connect to TransCanada network. This network currently flows into Alberta and can easily be reversed to pick up gas from the Peace region and beyond.
In the end the cheapest gas will go into the pipeline though, so if Alberta gas is cheaper than Horn River gas it will head west. Shell isn't going to drill a new well in Horn River if they can drill cheaper gas in Alberta. (Unless they want enough gas to take from both)

[Azure]

I don't find it that hard to understand why people in BC, especially those close to where the pipeline would go are so against it being there.

There is a lot of amazing land that COULD be threatened. I wouldn't agree with the pipeline until they go WAY above and beyond to make sure it is safe.

And yes I understand that no pipeline means more transportation by rail, which is far more dangerous.

[Azure]

Originally Posted by fotze

They are using their position to get cash, same thing the owners and players did in the NHL negotiations. There is the environmental rhetoric that is easily solved, its the money.

Its like any landowner, there isn't any environmental issue that isn't solved with a larger cheque.

That might all be, and I certainly don't discount the idea that many of them are being complete hypocrites with their arguments. Fact still is that a lot of beautiful land is in danger of being affected should there be a spill. There absolutely have to be VERY high safety standards in place that have been vetted from an outside source. Only then should the pipeline be allowed to be built.

And for the record, I absolutely agree with it. I just want it to be built way beyond ANY safety standard currently in place. I want them to do much better.

[GP_Matt]

Originally Posted by Azure

I wouldn't agree with the pipeline until they go WAY above and beyond to make sure it is safe.

And yes I understand that no pipeline means more transportation by rail, which is far more dangerous.

If anyone in BC was truly worried about the dangers of the pipeline they would have asked for assurances like more shut down valves, more frequent pigging, and stricter controls on the crossings. None of that was brought up, because it was offered right from the start. Christie Clark just asked for more money.

[GP_Matt]

Originally Posted by Azure

That might all be, and I certainly don't discount the idea that many of them are being complete hypocrites with their arguments. Fact still is that a lot of beautiful land is in danger of being affected should there be a spill. There absolutely have to be VERY high safety standards in place that have been vetted from an outside source. Only then should the pipeline be allowed to be built.

And for the record, I absolutely agree with it. I just want it to be built way beyond ANY safety standard currently in place. I want them to do much better.

A few years ago, Kinder Morgan added a line loop to their Trans Mountain pipeline. It was 160 kilometers and ran through Jasper National Park and Mount Robson Provincial Park. Driving through now, you can hardly tell that it is there and the environmental damage was nil. The existing line has been running for 50 years with no issues. It runs parallel to the Fraser River and crosses it. There is no question that this is a sensitive area and that a spill in the Fraser would be huge. The fact is though that the line is well constructed and the safety measures are already in place to make sure that these lines do not have issues.

[Tinordi]

The reason that 65% of British Columbians are against Northern Gateway isn't because they aren't getting enough financial benefit. It's because they don't want a pipeline running through their territory and oil tankers off their coast, full stop. You may disagree with that, but it's not like sweetening the pot is going to result in big movements of support in BC. Northern Gateway is effectively dead.